Barclays has reported first-quarter profits fell by a quarter from a year ago,
hit by the costs of restructuring and increasing losses in Europe.

Adjusted pre-tax profit for the three months to March 31 were down 25pc to £1.78bn, down from £2.4bn in the same quarter a year ago, according to aninterim statement this morning.

But, statutory results have improved from a loss of £525m last year to a profit of £1.535bn, underscoring the distorting impact accounting rules have on bank balance sheets.

Barclays' chief executive Antony Jenkins said profits had been dented by a £514m charge to cover costs associated with "Project Transform", the strategic review announced in February which detailed plans to axe 3,700 jobs and make £1.7bn in cost cuts in a radical bid to restore the bank's tattered reputation.

Mr Jenkins said the charge covered the "immediate priorities" of the review, which were to reduce its European retail branch network so it could focus on the mass-affluent segment and on re-positioning its equities and investment banking operations in Asia and Europe

The chief executive said he expected a further £500m of costs in order to execute the 'Project Transform' in 2013.

The changes are an attempt to make a clean break with the past for Britain's third largest bank.

Mr Jenkins said the cuts showed his plans for change at the bank were not mere “window dressing or PR” as he pointed to the financial cost of exiting controversial businesses.

The bank has already confirmed it would shut its controversial structured capital markets (SCM) unit, responsible for giving tax advice to the bank’s wealthy clients, while all speculative trading in agricultural commodities would be ended.